Payroll Tax items.

A clear definition of payroll tax items and cost of goods (COGS) is needed to organize the roles and responsibilities in QuickBooks Desktop (QBDT), @CEH-79.

COGS are normally affected by the sale of inventory items on invoices or sales receipts. On the other hand, the payroll expenses/liabilities are affected once taxes and employee wages are paid. As a result, they will be posted directly under those accounts.

If you need to change the account where payroll transactions are posted, edit the payroll item to update the posting location for your transactions. Let me show you how:

1. From the Lists menu, select Payroll Item List.
2. At the lower left side, click Payroll Item.
3. Select Edit item. 
4. Select the Account dropdown to change the location.
5. Change the info needed on each window.
6. Then click Okay.

To ensure you choose the correct account, I recommend consulting an accounting professional to avoid possible errors or discrepancies.

Moreover, you can check this article to guide you through running, printing, and customizing payroll reports in QuickBooks Desktop Payroll: Run payroll reports.

Please keep me posted if you have additional questions about payroll taxes in QuickBooks Desktop. I'm here to help. Have a nice day.

@MichaelaS   RE: COGS are affected only by the sale of inventory items on invoices or sales receipts. On the other hand, the payroll expenses are affected once taxes and employee wages are paid. As a result, they will be recorded directly under payroll expenses.

Your word salad isn't correct at all:

- A user can use a GOGS account like any other income or expense account, in any way they want on most any type of transaction that they want. For example, a paycheck.

- Payroll expenses need not be recorded "under" payroll expenses, whatever that means. Again, a user can use most any account they want on payroll items for their payroll expenses.

- Paying accrued taxes is not an expense. And so, when taxes are set up correctly, paying payroll taxes does not impact any expense accounts. Paying taxes impacts payroll liability balances.

Thank you for the reply.

Thank you for the reply.

I am an accounting professional, just not a QBs expert.

COGS is all expenses directly related to the production of your product/service. This includes direct labor (in our case floor installers), indirect labor (Project Superintendents) and employer paid payroll taxes (FICA, UI, etc.). An easy way to think about it; What costs would not be incurred if we were not manufacturing products or providing services? Those costs are COGS.

There are exceptions, such as an accounting firm, since all of the staff are working to provide the service to their clients, there is no need to seperate the labor costs.

Regards,

@CEH-79 

I see that you edited your post, which was incorrect before and still is.

For example, this new word salad makes no sense at all. I can't even begin to guess what you are talking about:

RE: A clear definition of payroll tax items and cost of goods (COGS) is needed to organize the roles and responsibilities in QuickBooks Desktop (QBDT), @CEH-79.

What? Clear roles and responsibilities have absolutely nothing to do with setting up payroll tax items and COGS. Nothing at all.

RE: COGS are normally affected by the sale of inventory items on invoices or sales receipts.

Still wrong.

RE: On the other hand, the payroll expenses/liabilities are affected once taxes and employee wages are paid. As a result, they will be posted directly under those accounts.

Still wrong. That accounts are effected (not affected) when "wages are paid?" has no impact on the accounts that are used. "Posted directly under those accounts" is nonsensical. What accounts? Posted directly under? This is more word salad.

RE: If you need to change the account where payroll transactions are posted, edit the payroll item to update the posting location for your transactions. Let me show you how:

The OP didn't ask about changing the accounts on payroll items. Did you even read the question?

RE: To ensure you choose the correct account, I recommend consulting an accounting professional to avoid possible errors or discrepancies.

The OP didn't ask about the correct account to use.

RE: Moreover, you can check this article to guide you through running, printing, and customizing payroll reports in QuickBooks Desktop Payroll: Run payroll reports.

The OP didn't ask about any of these things. They do not need to know more information about any of them.  Adding fluff like this to your non-answer is not helpful.